President Trump’s top economic aide on Friday said the country is not heading toward a recession and defended the commander-in-chief’s tariffs against the U.S.’s biggest trading partners.
“No, we’re not headed for a recession, but also don’t forget, Stu, as you know, that the tariffs that are in place with Canada and Mexico are there because we’re fighting a drug war,” White House National Economic Council Director Kevin Hassett said during his Friday morning appearance on FOX Business’ “Varney & Co.”
“And during the drug war negotiations then, we’ve gotten quite a lot of movement from Canada and from Mexico in part of a negotiation to get them to tighten up things and make it harder for fentanyl to ship into the U.S.,” Hassett told Fox Business host Stuart Varney. “And so during a negotiation, sometimes terms will change because we’re making progress.”
Trump this week imposed 25 percent tariffs on goods coming from Mexico and Canada, along with an additional 10 percent levy on China.
Two of the three countries quickly retaliated. Canada slapped a 25 percent tariff on $30 billion in goods. China inserted a 15 percent tariff on a variety of items, including chicken, wheat, corn and cotton. Another 10 percent levy was added to imports of sorghum, soybeans, pork, beef, seafood and other items.
On Thursday, Trump halted tariffs on Canada and Mexico’s goods that are covered by the 2020 U.S.-Mexico-Canada Agreement (USMCA), a pause that is set to last until April 2. The tariff on Canada’s potash, an important ingredient for fertilizer, was set to be dropped to 10 percent.
“That includes autos, and the autos were the lead in getting this done, but also Canada and Mexico have done a good job offering us ever more work to prove to us they’re going to cut the fentanyl deaths,” Commerce Secretary Howard Lutnick said.
However, the Commerce secretary said that once the halt is lifted, reciprocal tariffs will take place.
“Hopefully Mexico and Canada will have done a good enough job on fentanyl that this part of the conversation will be off the table, and we’ll move just to the reciprocal tariff conversation,” Lutnick said.
Hassett said on Friday that the administration sees tariffs as a “negotiation that’s very orderly. And the Trump administration is saving lives with this negotiation. And that’s why the parameters are changing.”
Trump’s first jobs report of his second term showed that the country added 151,000 jobs in February while the unemployment rate went up to 4.1 percent. The report showed the job market being stable as consumer confidence is still down amid the rising economic concerns.
Economists said the recent firing of federal government workers were not yet entered in the federal labor database.
“The federal layoffs we’ve been hearing so much about will begin showing up in next month’s release,” NerdWallet’s Economist Elizabeth Renter wrote.
Hassett described the Friday morning jobs report as “fantastic.”
“There were other factors, small factors, that made it so that I thought the number was going to be a lot lower than that. One of those is that it was a bad flu month, and so a lot of people weren’t applying for jobs,” he said Friday morning. “And despite that, we got a strong number. And so I was very, very pleased with the number today.”
